People in Moscow grab their last Big Macs before McDonald's temporarily shuts Russian outlets over Ukraine - Action News
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People in Moscow grab their last Big Macs before McDonald's temporarily shuts Russian outlets over Ukraine

McDonald's is closing 850 restaurants in Russia on Monday, one of more than 350 companies that have suspended operations or withdrawn from the country.

The Kremlin threatens to seize assets, infrastructure as hundreds of companies leave Russia

Russians fear country is going backwards as foreign businesses pull out

3 years ago
Duration 2:03
As foreign companies like McDonald's suspend or withdraw their business from Russia and local authorities crack down on dissent, many residents fear their country is moving backwards.

When the first McDonald's opened in Moscow in 1990, thousands lined up for hours to get a taste of the quintessential Western fast food chain.

It was the waning days of the Soviet Union, and for many citizens,the golden arches were a symbol of progress and the gradual lifting of the Iron Curtain.

Today, with 850 of the restaurants closed, the move is seen as the opposite.McDonald's is joiningStarbucks, Ikea, Heinekenand other brands in suspending business in Russia amidwidescale Western sanctions against the countryover the situation in Ukraine.

"When we stood in line all those years ago, we understood the country had a real future," said Olga,who wouldn't give her last name butspoke to CBCNews outside of a Moscow McDonald's Saturday afternoon. She, like many others,had come to say goodbye over a final meal of burgers and fries.

This location, near Pushkin Square, was the first restaurant to open in Russia. Olga describes its closure as upsetting, and illustrative of where the country is heading.

"We are falling back 30 years."

A couple sit inside a Moscow McDonald's on Saturday. All of the chain's restaurants in the country closed today. (Dmitry Kozlov/CBC)

Temporary closure

In a statement, McDonald's says the move is temporary and it will continue to pay its 62,000 employees.

It is one of several foreign brands that are either leaving, suspending businessor pulling their products out of Russia. The list of companies grows, even as the Kremlin warns it may move to seize foreign assets as retribution.

According to researchcompiled by Yale University, more than 350 companies have withdrawn.

In shopping malls and on pedestrian streets in Moscow, luxury shops like Chanel are boarded up, asare clothing retailers such asH&M and Zara.

"I'm not interested in politics but this situation is quite scary," 19-year old Paulina said before having one of her final McDonald's meals on the weekend.

"[I]just want everything to be open. I can't buy a new phone.I can't buy new cosmetics.I can't live my life, so I don't want this."

Olga stood in line when McDonald's opened in Russia in 1990 and returned to have a meal on the final weekend. (Dmitry Kozlov/CBC)

Disappearing brands

Teens and young adults who grewup in a more modern Russia have never experienced the commercial isolation and often empty shelves of the soviet era. Now many brands they knowand have relied onwill no longer be easy to access, at least in the near future.

Paulina said she often comes to McDonald's because the food is cheap andtasty, and the restaurantis a good place to hang out with friends because she feels a sense of freedom there.

The walls and towers of the Kremlin are reflected in a window of a McDonald's restaurant in Moscow in 2014. (Maxim Zmeyev/Reuters)

Over the weekend inside the sprawling restaurant, most people lined up behind rows of digital touch screens to enter their order, while tables were packed with customers eating off of plastic trays or out of paper bags.

Back in 1990, the McDonald's was staffed by an eager crew of workerswhose job training included how to smile at customers, a Western norm that was not part of the soviet tradition.

According to a CBCNews report at the time, 30,000 customers were served on that first day.While reviews on the meals were mixed, Moscovites were keen to try the city's first major import.

WATCH |McDonald's opened its first Russian location in 1990:

McDonald's opened its first Russian location in 1990

3 years ago
Duration 3:23
Russians flocked to the first-ever McDonald's in the country, in Moscow's Puskin Square.

Possible retribution

In the face of the suspensions,Russian President Vladmir Putinsaidthe countrywill look atimport substitutionand that the sanctionsand closure of Western companies would increase the country's "independence and sovereignty."

On March 10, while participating in a government meeting by video conference, Putin mused that the country could bring in outside management and transfer companies "to those that want to work."

Russian President Vladimir Putin, shown attending a meeting with government members via a video link in Moscow last week, said the departure of foreign companies will increase the country's independence and sovereignty. (Reuters)

Officialshave said Russia could move to seize assets from any business that has withdrawn and where foreign ownership is greater than 25 per cent.

KFC, which is owned by U.S.-based Yum! Brands, has closed dozens of company-owned stores in Russia, but the majority of its outlets are operated as franchises and the owners can choose to stay open.

Maxim Larin, 20,manages a franchise in central Moscow and says he may be able to take on some additional workers who were laid off at other locations, but says the entire situation has left him feeling broken and confused about what will happen next.

"This uncertainty is like a fog," he said, adding that he is fearful for his friends and family in Russia, but even more so for the people of Ukraine.

"No one needs this war."

Hundreds queue outside the first McDonald's restaurant in Moscow on Jan. 31, 1990. (Reuters)

But many others support what Russia insists is its "special military operation" and contends that the disappearance of foreign brands is no big loss.

Svetlana Klokova told CBCNews that she believes what is happening in Ukraine is "long overdue" and supports Russia because it is a "victorious nation."

She was visiting McDonald's with her 10-year-old daughter, a rare trip that Klokovasays the family only makes once every six months because her children like the french fries, which are "not part of Russian cuisine."

Klokova doubts McDonald's and other foreign brands will be gone very long because, she says, it doesn't make economic sense.

"They are losing a huge market. The Russian market has a huge potential," she said.

"I think they are giving into emotions. Once they figure this out, they will want to come back."

With files from Corinne Seminoff